The New York Times reports on the loss of good paying manufacturing jobs, pointing out that fewer workers are able to earn enough to support a middle class lifestyle. The article correctly notes that offshoring has been an important factor depressing the wages of manufacturing workers, since these workers now have to compete with workers in the developing world who earn close to $1 an hour. However the article mistakenly lists the offshoring of high-paying jobs like radiology as part of the story explaining the loss of middle class security. In fact, radiologists would typically be in the top 1 percent of wage earners. They have been beneficiaries of the lower wages received by manufacturing workers. These lower wages have been largely passed on in lower prices. There has been little change in the profit share of national income over the last decade, which means that the loss of wages by middle class workers has primarily led to higher real wages for high-end workers like radiologists. Those who are upset about the wage losses of middle class workers should applaud the outsourcing of high-end jobs, like those of radiologists. This outsourcing will put downward pressure on the wages of these high-end workers, leading to lower prices, which will increase the real wages of autoworkers, retail clerks, custodians and other low and middle income workers.
--Dean Baker
